11 March 2020
A SNAPSHOT OF RWANDA’S TIGHTENED FINANCIAL CRIMES LAWS
On 10 March, ENS Africa published an article about 2 key laws to counter money laundering, the financing of terrorism and the proliferation of WMD, in an effort to strengthen and increase confidence in its financial system. One of things the laws do is establish the Financial Intelligence Centre (FIC), which has been established as an independent body under the supervision of the Ministry of Finance. The article considers the responsibilities and powers of the FIC. Another thing done by the laws is to impose potential sentences of imprisonment of up to 25 years and fines of up to 20 times the amount granted to finance relevant to illegal activities. The article lists those persons required to file reports with the FIC. The new laws are said to align Rwanda’s AML/CFT legislation closer with international standards.
AUSTRALIA SOLD WEAPONS TO FRAGILE AFRICAN STATES, INCLUDING MALI AS UN WARNED VIOLENCE CREATING “HUMANITARIAN DISASTER”
On 10 March, the Guardian reported that freedom of information releases show that the Australian government approved a large volume of weapon sales to Mali even as the UN warned about the situation in the country. Australian weapons companies were given 31 permits last year to export weapons and military technology to African nations suffering from instability and violence, including Libya, Sudan, Somalia, Mali, the Central African Republic and the Democratic Republic of Congo; though the majority of exports went to Mali, with 16 permits to Mali alone.
PODCAST: THE CULLEN COMMISSION – MORE ON MONEY-LAUNDERING AND ORGANISED CRIME ON CANADA’S WEST COAST
In the latest TRACE podcast, former Crown Prosecutor and current investigative journalist, Sandy Garossino, looks at the early days of Vancouver’s money laundering scandal: how the problem was uncovered, the violence associated with infiltration by organised crime, what has been done to remedy the problem to date and what still remains to be done.
THIRD COUNTRIES ALIGN WITH EU ON UKRAINE SANCTIONS
On 11 March, a news release from the EU advised that Montenegro, Albania, Norway and Ukraine have announced that they will align themselves with EU Council Decision 2020/120/CFSP, which adds a further person to the sanctions imposed as a result of the Russian annexation of Crimea and Sevastopol.
SWEDBANK REPORTS $4.8 MILLION IN POTENTIAL SANCTIONS BREACHES TO OFAC
A news release from the Swedish bank on 11 March advised that an investigation of Swedbank’s work on AML conducted by the law firm Clifford Chance has found that transactions amounting to approximately $4.8 million in total constitute potential sanction violations between 2007 and March 2019. This has been reported to OFAC. The investigation focused on dollar-denominated transactions from 3 Baltic subsidiaries in Estonia, Latvia, and Lithuania, processed through the US financial system during the period 2014-2019.
CAMBODIA RANKS AT BOTTOM FOR RULE OF LAW IN EAST ASIA
On 11 March, Radio Free Asia reported that Cambodia has been placed 15th out of 15 countries surveyed in the East Asia and Pacific region for adherence to rule of law, according to a report released by the World Justice Project. It is also 127th out of 128 countries and jurisdictions worldwide.
AI TO BE USED IN CANADA’S MONEY LAUNDERING ENFORCEMENT EFFORTS
On 11 March, The Epoch Times reported that the national FIU, FINTRAC, is exploring artificial intelligence and machine learning to help sort through a deluge of data in the hunt for hidden dirty cash. The agency says technology can help money launderers but also create more efficient and effective ways of doing business for enforcement agencies. This is mentioned in an article about the FINTRAC annual report, which has been published.
MIAMI CRIME EXPERT TO PLEAD GUILTY IN VENEZUELA GRAFT CASE
On 11 March, Associated Press reported that Bruce Bagley, 73, a University of Miami professor who is a top expert on money laundering in Latin America was arrested in November and is scheduled to plead guilty for trying to hide $3 million in proceeds from a corruption scheme with Venezuela’s government.
IRELAND: FORMER SOLICITOR FACING €1.2 MILLION FRAUD CHARGES SENT FOR TRIAL
On 11 March, the Irish Independent reported that Michael Small, 53, is accused of multiple counts of theft, deception and accounting offences, alleged to have taken place over a 2-year period while he was in practice as a solicitor in Limerick.
UK CONSULTS ON SIMPLIFYING THE PROCESS ALLOWING FOREIGN INVESTMENT FUNDS TO BE MARKETED IN THE UK
As part of the UK Budget on 11 March, HM Treasury announced a consultation to 11 May which sets out the UK government’s proposal for a new process for allowing investment funds domiciled overseas to be sold to UK investors, to replace the existing regime, which is said not to be viable over the long-term. The proposed ‘overseas funds regime’ would introduce 2 new regimes based on the principle of equivalence: one for retail investment funds and one for money market funds.
UK CONSULTING ON MARKET ACCESS ARRANGEMENTS FOR FINANCIAL SERVICES BETWEEN THE UK AND GIBRALTAR
Another UK Budget announcement on 11 March, in the light of Brexit and UK commitments to Gibraltar, was a consultation which invites views on the main features of the proposed Gibraltar Authorisation Regime, including how firms will enter and exit the regime and measures to ensure the protection of UK consumers. The new regime is intended to protect financial stability, promote the safety and soundness of firms, protect market integrity and ensure high levels of consumer protection. It is based on aligned standards of financial regulation, authorisation, supervision and enforcement and will be underpinned by bespoke arrangements for information-sharing, transparency and co-operation between regulators.
HMRC TO GET PREFERENTIAL STATUS (AGAIN) AS OF 1 DECEMBER
On 11 March, an article from Morgan Lewis says that from 1 December, HMRC will be given preferential creditor status for certain taxes which a company has collected but failed to pay to HMRC on the date it enters insolvency. This was announced in the UK Budget on 11 March, and the necessary legislation will be introduced in the Finance Bill 2020.
100 CORRUPT OFFICIALS WANTED BY THE PEOPLES’ REPUBLIC OF CHINA
On 11 March, in his always interesting blog, Kenneth Rijock reproduces a poster containing the photos of the 100 most wanted fugitive Chinese government officials, all wanted for corruption. Many are believed to be living in the US and Canada.
US: 27 CHARGED IN MASSIVE HORSE DOPING BUST
On 11 March, an article from OCCRP said that 27 individuals, including trainers, veterinarians and drug suppliers, have been charged with a variety of crimes related to a massive horse doping scheme aimed to rig races across the US. They are accused of crimes ranging from misbranding and drug alteration to smuggling and obstruction of justice. Those involved include the trainer of one of the top racehorses in the world and winner of the 2020 Saudi Cup, and 2 top trainers, Jorge Navarro and Jason Servis.
KENYA: TAX AGENCY TO COLLECT $200 MILLION DEMURRAGE BACK TAXES
On 3 March, the East African reported that shipping companies are foreseeing an increase in fees they charge importers after the High Court ruled in favour of Kenya Revenue Authority (KRA) and the latter will now collect $200 million in back taxes from shipping companies. It is explained that “demurrage” was accrued in respect of cargo containers which have overstayed beyond their free stay period at different KPA-owned container freight stations. Demurrage is the term for the charge levied by shipping lines on importers for holding the container beyond the free period. The Court has held that demurrage is a form of income tax and that the shipping lines’ local agents have an obligation to withhold tax on the demurrage charge when remitting payments. Shipping lines wanted the court to make a finding that demurrage charges are not subject to tax in Kenya.
THE SPECIAL RELATIONSHIP – HOW THE FCA ASSISTS SEC INVESTIGATIONS
On 11 March, Corker Bining published a blog post which sets out to explore the key methods the FCA uses to assist their US counterparts, the SEC, and questions the protections afforded to individuals interviewed under compulsion by the FCA at the SEC’s request. It points out that the cooperation has existed for longer than one might think, and how the Securities Exchange Act 1934 in the US and the Financial Services and Markets Act 2000 provide a legal framework. It then examines the process for cooperation, including SEC presence at “compelled interviews” under UK legislation, and asking if this is a means to circumvent the 5th Amendment (i.e. the right not to incriminate oneself).
US COMMERCE DEPARTMENT EXTENDS HUAWEI EXPORT LICENCE PRIVILEGE
On 11 March, American Shipper reported that the US Department of Commerce has announced that it will extend a temporary general license for certain US exports to Chinese telecommunications equipment manufacturer Huawei Technologies Co Ltd and 114 overseas affiliates until 15 May, as the current temporary general licence was due to expire on 1 April.
MYANMAR SHOULD FINALLY COME CLEAN ABOUT ITS CHEMICAL WEAPONS PAST
On 11 March, the Bulletin of the Atomic Scientists carried an article pointing out that, for all the criticism of the Myanmar government on human rights grounds, no US government official had publicly discussed the country’s secret chemical weapons programme since the Reagan Administration. However, the article does say that there are signs that Myanmar is finally making moves to come clean to the international community about its chemical weapons programme, which is believed to be inactive. It is said that, to date, the most detailed public information on Myanmar’s chemical weapons programme is a declassified 1991 US National Intelligence Estimate. It was alleged that, that, with West German assistance in the early 1980s, Myanmar built a small chemical weapons production facility that was used to manufacture about 500 litres of mustard agent. There were also unverified claims from insurgents that the army had imported chemical weapons from China. A West German company is named in the article, Fritz Werner – which denies assisting Myanmar/Burma – which was also implicated in equipping Saddam Hussein’s Iraq.
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